Organizational Feasibility

• Organizational feasibility pertains to a company's realistic ability to handle an undertaking. What determines organizational feasibility includes the management team's set of skills, competency and available resources. Scott Andrews Shane, author of the book "Entrepreneurship: A Process Perspective," notes that one example of a limitation is the management team's unfamiliarity with the industry: not knowing the best location to start the company, ignorance of production methods and lack of financial skills are just a few impediments. Overcoming these obstacles and requires assembling a management team with a diverse set of complementary skills.
  
  

Financial Feasibility

• Financial feasibility has to do with a business's capability to raise capital and maintain a stable cash flow. In some cases, the company may have imperfect information and must make projections based on estimates. Bruce Barringer explains in his book "The Truth about Starting a Business" that assessing financial feasibility is accomplished in two ways. The first is by estimating the cost of starting the business by formulating a preliminary budget. The second is by comparing the potential business venture's financial picture with that of an established business.
  
  

Differences

• Organizational feasibility requires gaining intangible assets such as skills and know-how, whereas financial feasibility is almost exclusively related to the acquisition of asset-based resources including cash. It is not uncommon for a businesses use cash to achieve organizational feasibility; paying for a strategic management seminar is an example. Indeed, achieving the necessary know-how to run a business is an easier undertaking if the business is financially feasible. Likewise, becoming financially feasible is a much simpler task if the management team is already knowledgeable about the product and its related industry.
  
  

Considerations

• Both financial and organizational feasibility are required to launch a business. Thus, one type is not more important than the other. In addition to these two sectors, a company also gauges market feasibility and contingency plans. Having a clear picture of these issues allows the business to present its ideas to investors for financing, identify and overcome potential obstacles and gain the necessary skills or financing to proceed.